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CORVALLIS SUSTAINABILITY COALITION – ENERGY WORKGOUP

ANALYSIS AND RECOMMENDATIONS BY JIM MILLER, CAP AND TRADE POLICY; "CARBON TAX" ALTERNATIVE
jimmiller5417@yahoo.com

GOAL 3, STRATEGY 2, ACTION 1:

Make greenhouse gas elimination more affordable by using Western Climate Initiatives or other cap and trade dollars to subsidize local efforts. This assumes we best WCI/other standards for GHG elimination, the basis for cap and trade.”

The “cap and trade” approach will actually promote greater GHG and general pollution. By monetizing GHG emissions, the producer merely raises its prices and passes the cost onto the consumer who are the ones being damaged by pollution. This approach is doomed to failure by its very design. Most large energy producers control the market and set production to maximize profits. They also set prices because the demand for their product is inelastic. This is the Bush-Cheney-Halliburton and Seven Sisters' offering. No thanks.

The better approach is to enact legislation which creates a bioremediation fund and a carbon tax. The amount of GHG released by a company would be taxed on two fronts:

  1. The total annual emissions, with each type of GHG gas taxed at a different rate, depending on their effect on the atmosphere, soil, plants water and living things. For instance releasing CO2 would be taxed less than releasing N2O.
  2. There would also be an “avoidable” tax. A company which is producing GHG, and could reduce or eliminate such production, but fails to do so after warning, is taxed on the amount of GHG they could have eliminated had they followed the warning. This tax would be an incentive to companies to spend the time and money cleaning-up their own production. This tax is additive to No. 1. Feasibility would include an annual determination (probably a national one) of the value of a human life – say 1.9 million – and the health costs due to pollution and the lost wages due to pollution. Using a Gaussian Plume Model, one could assess the population affected by the point source, then calculate the damages to the population, then compare that to the cost of retrofitting the plan to reduce or eliminate the pollution. The net difference would be taxed at a rate set by the Legislature. See:

The tax revenue would be placed in a bioremediation fund, some of which (say 1/3rd) would be used to subsidize the plant retrofit costs incurred by the complying company. Another part (1/3rd) would be subvented to mass transit and the balance of the fund revenue would be used as a revolving equity investment fund for start-up and grow-up companies with proven energy saving or green energy production technology applications.

Ten percent of the fund, off the top, would be available for administration of the tax and the fund, a portion of which would be used for general population education and outreach.


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